Saving for your first home can feel overwhelming — but with the right plan, it becomes completely achievable. This guide gives you a clear, practical path to building your deposit, boosting your savings, and getting your finances mortgage‑ready.
How Much Deposit Do You Actually Need?
The amount you need depends on:
- Property price
- Your mortgage lender’s requirements
- Whether you’re using schemes like Shared Ownership or First Homes
Typical deposit requirements:
- 5% deposit – Minimum required for most mortgages
- 10% deposit – Better rates, more lender options
- 15%–20% deposit – Best mortgage rates
Example:
- £250,000 property
- 5% deposit = £12,500
- 10% deposit = £25,000
- 20% deposit = £50,000
How Long Will It Take to Save Your Deposit?
This depends on:
- Your monthly savings
- Any bonus contributions (LISA, gifts, side income)
- Your existing savings
I can add a Deposit Savings Calculator widget here — just say the word.
The Best Ways to Save for a House Deposit
Here are the most effective, realistic saving methods for UK first‑time buyers.
1. Lifetime ISA (LISA) – 25% Free Bonus
- Save up to £4,000 per year
- Government gives you a £1,000 bonus each year
- Can be used for your first home up to £450,000
- Must be open at least 12 months before buying
Best for: First-time buyers wanting the fastest way to grow a deposit.
2. Regular Savings Accounts
- Often offer higher interest than easy-access accounts
- Monthly limits apply
- Great for structured saving
3. Cash or Stocks & Shares ISA
- Tax-free interest or investment growth
- You can mix with a LISA (ISA allowance is £20,000/yr)
Stocks & Shares ISA — better for long-term (3–5+ years) deposit saving.
4 High-Interest Savings Accounts / Easy Access
- Great for emergency funds
- Flexible access
5. Bank Help-To-Buy Alternatives
Some banks offer:
- First-time buyer bonuses
- Preferential savings rates
- Cashback when you open a mortgage with them
6. Boosting Income While Saving
- Side gigs/freelancing
- Overtime or bonus-heavy roles
- Selling unused items
- Rent-free living (if possible)
Tips to Save Faster
- Automate transfers on payday
- Use savings challenges (e.g., 1% weekly increase)
- Track spending with a budget app
- Cut high-cost and subscription expenses
Can You Use Gifts for a Deposit?
Yes — but lenders require:
- A signed gifted deposit letter
- Proof of ID from the giver
- Evidence the money is a gift, not a loan
Deposit Requirements for Government Schemes
Shared Ownership
- Often only 5% of the share you’re buying
First Homes Scheme
- 5% deposit minimum
Right to Buy
- You may not need a deposit if the discount covers it
What’s Next?
Here are the best follow-up guides for readers:
- Mortgage Affordability Guide
- How Much Can I Borrow?
- Lifetime ISA Explained
- Step-by-Step: Buying Your First Home
